If parents pay for college, GPA drops but graduation more likely

Parents who want their kids to do well at college might want to set some standards before they kick in cash. When the Bank of Mom and Dad chips in for college expenses, students don't work quite as diligently and GPAs tend to be lower. The students are, however, more likely to graduate, according to research from the University of California, Merced.

The study by sociology professor Laura T. Hamilton found that GPAs fell with increased financial support from parents. The findings are published in the journal American Sociological Review.

"Students with parental support are best described as staying out of serious academic trouble, but dialing down their academic efforts," she wrote. "Rather than strategically using resources in accordance with parental goals, or maximizing on their ability to avoid academic work, students are 'satisficing': They meet the criteria for adequacy on multiple fronts, rather than optimizing their chances for a particular outcome. As a result, students with parental funding often perform well enough to stay in school but dial down their academic efforts.

"It's a modest effect, not big enough to make the kid flunk out of college," Hamilton told the New York Times. "But it was surprising because everybody has always assumed that the more you give, the better your child does."

The negative impact on grades was less at elite institutions than at other private, expensive, out-of-state colleges, but it existed at all types of schools. The higher graduation rate of students whose parents paid their way is not surprising, she said, since many students leave college for financial reasons.

"It allows for a lot of other activities in college that aren't academic," Hamilton told the Associated Press. "Participation in the social scene is expensive — money to hang out, drink." But "the more you have all these extras, the more you can get dragged into the party scene, and that will drag down your GPA."

It is a call not for decreased help from parents, said the researcher, but rather the study points out the need to set standards, such as a required GPA, to keep students accountable for performance as they receive help paying for their education.

The study was based on nationally representative data sets collected by the National Center for Educational Statistics, and was supported by a grant from the American Educational Research Association.

In a release announcing the study, the American Sociological Association noted that for several decades colleges and universities have increased tuition to deal with "deep cuts in external funding," with the cost often hitting American parents. That was the impetus for the study. Hamilton wondered if that financial contribution from mom and dad boosted or lowered a student's motivation to do well.

"Regardless of class background, the toll parental aid takes on GPA is modest," Hamilton wrote of the study. "Yet any reduction in student GPA due to parental aid — which is typically offered with the best of intentions — is both surprising and important."

The effect is "steepest at families earning over $90,000. At that level, and controlling for other factors, parents not giving their children any aid predicts a GPA of 3.15. At $16,000 in aid, GPA drops under 3.0. At $40,000, it hits 2.95," wrote AP's Justin Pope.

"While rich families obviously find it easier to contribute, poorer families do as well, at greater sacrifice. But Hamilton says the damage may be greater for those families, because lower GPAs don't hurt better-off students as much in the job market. Wealthier students can rely on connections and further help from parents," the article noted.

The research release pointed out that other studies have shown college students spend roughly 28 hours a week on classes and homework, which is less time than an average high school student spends in class. On the other hand, that college student spends an average of 41 hours a week on social or recreational pursuits.

Hamilton's research set the odds a student would graduate within five years at 56.4 predicated probability for those who had no financial help from their parents. When parents chipped in $12,000, the probability increased to 65.2 percent.

Other sources of financial aid, including grants and scholarships, student employment and veteran's benefits don't have the same impact on GPA. The researcher said it's possible those funding sources leave a student with more of a sense they "earned" it. But those funds are also harder to get in tough financial times.

"Ultimately, it's not bad to fund your children," Hamilton told the Times. "My kids are little, but I plan to pay for them — after we talk about how much it costs, and what grades I expect them to achieve."